During the week of 9th–15th February 2026, multiple regulatory updates were issued across tax, financial, corporate, and trade laws. CBDT released Draft Income Tax Rules and Forms 2026 aligned with the Income Tax Act, 2025, inviting stakeholder feedback. The Supreme Court clarified that illegal mining compounding fees do not attract TCS under Section 206C(1C), while the Delhi High Court reaffirmed TDS applicability on annual lease rent. In GST, several AAR rulings addressed composite healthcare supplies, fixed establishment registration, used car valuation, non-compete services, land deduction norms, and ITC restrictions on construction. RBI introduced major amendments on capital market exposure, MSME collateral-free loans up to ₹25 lakh, NBFC provisioning norms, and draft directions on REIT financing and recovery practices. SEBI updated ICDR regulations and issued consultation papers on ETFs and Social Impact Funds. MCA expanded Regional Director jurisdictions and appointed RoCs as adjudicating officers. DGFT, Customs, IBBI, and DPIIT also issued key trade, insolvency, and FDI updates.
Notifications & Circulars issued during week (9th – 15th Feb 2026)
(Income Tax, GST, Central Excise, Custom Duty, DGFT, SEBI, MCA, IBBI, RBI)
(Click the Link for Notification/ Circular as issued)
A. Income Tax
Draft Income Tax Rules and Forms released: CBDT has placed the Draft Income Tax Rules 2026, and accompanying forms in the public domain for stakeholder consultation ahead of their proposed notification. These draft rules are aligned with the Income Tax Act 2025, which is scheduled to come into force on 1st April 2026. Two navigators have also been released to map the old rules and forms to the new draft framework, enabling rule-wise and form-wise feedback. Inputs are invited across four areas i.e. simplification of language, reduction of litigation, reduction of compliance burden, and identification of redundant or obsolete Rules and Forms.
(Link: Press Release Dated 08/02/2026, Seek Input Draft Rules and Forms)
(Link: Draft Income Tax Rules 2026)
(Link: Navigator Income Tax Rules)
(Link: Draft Income Tax Forms 2026)
(Link: Navigator Income Tax Forms)
(Link: Notes Income Tax Rules and Forms)
SC Upholds No TCS under section 206C(1C) on Illegal Mining Compounding Fees: Case of DCIT vs District Mining Office, SC Judgement Dated 27th February 2026. The apex court held that compounding fees collected from illegal miners/transporters under the Chhattisgarh Minor Mineral Rules, 2015, being in nature of punitive fines do not constitute royalty or licensing fees for mineral rights. Thus it does not attract Tax Collected at Source (TCS) under Section 206C(1C) of the Income Tax Act.
HC, TDS applicable on Annual Lease Rent to Development Authority: Case of CIT vsMahagun (India) Pvt Ltd, HC Delhi Judgement Dated 9th February 2026. HC reaffirmed that annual lease rent paid to Greater Noida Development Authority attracts TDS under Section 194I of the Income Tax Act. It had allowed the assessee appeal by relying on the earlier High Court ruling in Rajesh Projects (India) Pvt Ltd vs CIT (TDS)-II, which held that lease rent paid for use of land constitutes “rent” within the meaning of Section 194I and is therefore subject to TDS. This position was affirmed by the Supreme Court in New Okhla Industrial Development Authority vs CIT.
B. GST
AAR, Inpatient Medicines exempt from GST as Composite Healthcare Supply: Case of Rajarajeshwari Hospitals Private Limited, AAR Tamil Nadu Ruling dated 29th January 2026. AAR ruled that medicines, surgical items, and implants used for patients admitted to the hospital are considered part of the “health care services” (composite supply) and are therefore exempt from GST under Entry No. 74 of Notification 12/2017 Central Tax (Rate). Medicines sold to outpatients (non-admitted patients) are considered a separate sale of goods, not a composite service, and are subject to GST.
AAR, Energy Storage is not equal to Electricity Supply, taxable at 18% GST as Support Services: Case of Indigrid 2 Private Limited, AAR Tamil Nadu Ruling dated 29th January 2026. AAR ruled that developing and operating a Battery Energy Storage Systems (BESS) facility constitutes a supply of service, specifically classified as “support services to electricity, gas, and water distribution” under HSN code 9986. These services are taxable at 18% GST.
AAR, GST Registration required due to Fixed Establishment at Construction Site: Case of Teemage Builders Private Limited, AAR Tamil Nadu Ruling dated 21st January 2026. AAR ruled that construction sites outside the state had sufficient permanence and were supported by necessary human and technical resources for execution of works contracts, thereby constituting ‘fixed establishments’ under Section 2(50) of the CGST Act. The applicant was required to obtain GST registration in the States where such sites were located. It further held that construction sites within the state must be declared as additional places of business. Movement of materials to out-of-State sites was held to be ‘supply’ under Section 7 read with Schedule I, as establishments in different States are deemed distinct persons under Section 25, even in absence of consideration.
AAR, GST on used car sale by manufacturer payable on Full Value, Not Margin: Case of Paranthaman Engineering Works, AAR Tamil Nadu Ruling dated 12th January 2026. AAR ruled that the sale of the car by a registered manufacturing concern is subject to GST on the full sale value, rather than just the margin. This does not cover under concessional ‘margin scheme’ typically available under Notification 8/2018 Central Tax (Rate) for specific used vehicle scenarios.
AAR, E-Commerce deliveries by road with Consignment Note is GTA Services: Case of Flipkart India Private Limited, AAR Tamil Nadu Ruling dated 9th January 2026. AAR ruled that transportation services provided by Flipkart for e-commerce deliveries qualify as Goods Transport Agency (GTA) services. Transportation services (including incidental services like loading/unloading) provided to unregistered customers are exempt from GST under Sl. No. 21A of Notification 12/2017 Central Tax (Rate).
AAR, GST payable on domestic part of Non-Compete Agreement but not on Overseas Services: Case of Jolarpettai Veeramuthu Sreedhar, AAR Tamil Nadu Ruling dated 9th January 2026. The application seek clarity on the GST implications of non-compete and non-solicitation fees received pursuant to a share sale transaction. The applicant was a shareholder of a company engaged in bespoke software development, whose entire shareholding was sold to two purchasers, i.e. one located outside India and one in India, along with the goodwill of the business. AAR ruled that the activity of applicant agreeing to refrain from doing an act is Supply of Services. The services rendered to party located outside India, qualifies as export of service, is ‘zero rated supply’, attracting NIL rate of GST. The services to parties within India will attract GST as applicable.
AAR, Deemed one-third land deduction for GST is Mandatory despite separate Sale Deed: Case of Jaypee Enterprises, AAR Tamil Nadu Ruling dated 8th January 2026. AAR has clarified the taxability of residential projects where a promoter sells land and provides construction services. The ruling establishes that even if a developer has a separate sale deed for the land, they must follow the statutory one-third land value deduction for GST purposes rather than deducting the actual land value.
AAR, GST ITC denied on Commercial Building Construction despite Taxable Rental Output: Case of Super Chips, AAR Tamil Nadu Ruling dated 16th December 2025. AAR denied the ITC, holding that Section 17(5)(d) of the CGST Act blocks ITC on construction of immovable property (excluding plant and machinery), even if used for business purposes like renting. It emphasized that buildings are excluded from the definition of ‘plant and machinery’, and retrospective amendments clarified that ITC cannot be claimed on these construction inputs.
AAR, Corporate Meal delivery is service since Supply includes Logistics and Coordination, 18% GST Applicable: Case of Frutta Services Private Limited, AAR Tamil Nadu Ruling dated 16th December 2025. The applicant is a GST-registered entity engaged in supplying food and beverages to corporate clients for distribution to their staff. The applicant does not manufacture, prepare, or process food. It operates as an aggregator by procuring cooked food from empanelled third-party kitchens and arranging delivery to client locations. AAR ruled that the applicant is required to pay tax on the composite supply involving supply of food at the rate of 18% as per serial 7(vi) of notification 11/2027. The applicant is eligible to avail ITC on the inward supply.
AAR, GST applicable despite goods not entering India due to Supply between Indian Parties: Case of Snag & Bag Retail Private Limited, AAR Tamil Nadu Ruling dated 21st November 2025. The applicant procures goods from Spain/USA and sells them to another Indian entity, with goods moving and delivered entirely outside India. As supply occurs between two persons in taxable territory of India and title transfers in India, Para 7 of Schedule III is inapplicable, and GST is payable with mandatory registration.
SC, Courts cannot create alternative GST Refund Mechanisms outside Section 54: Case of Union of India vs Torrent Power Limited, SC Judgement Dated 10th February 2026. The apex court held that, court are not allowed to invent the new modality which is not contemplated by the provision of Law nor rules. It ruled that since the tax incidence was passed to consumers, the refund must go to the Consumer Welfare Fund.
HC, Pendency of GST proceedings does not extend or revive provisional attachment beyond the Statutory Period: Case of Shagun Goel vs Director General GST, HC Delhi Judgement Dated 21st January 2026. HC held that Section 83(2) of the CGST Act operates automatically, and once a period of one year from the date of provisional attachment expires, the attachment ceases to operate by force of statute, irrespective of whether proceedings under the Act are still pending.
C. Central Excise
No Notification/ Circular during the week.
D. Custom Duty
Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver: CBDT notified the Tariff Values of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver, which shall come into force w.e.f. 14th February 2026. The tariff value for crude palm oil is set at USD 1086 per metric ton, while gold and silver have tariff values of USD 1624 per 10 grams and USD 2707 per kilogram, respectively. The tariff value for areca nuts is fixed at USD 7020 per metric ton.
(Link: Customs Notification 20/2026 (NT) Dated 13/02/2026)
Anti-Dumping Duty on Toluene Di-Isocyanate (TDI) originating in or exported from European Union and Saudi Arabia: Anti-dumping Duty has been imposed on imports of ‘Toluene Di-Isocyanate (TDI) having isomer content in the ratio of 80:20’ originating in or exported from European Union and Saudi Arabia, and imported into India. It shall be effective for a period of five years.
(Link: Customs Notification 03/2026 (ADD) Dated 10/02/2026)
E. Directorate General of Foreign Trade (DGFT)
Halal Certification List expanded due to addition of 20 Export Countries: The notification streamline the Halal certification process for exports of specified meat and meat products by expanding the list of countries where certification under the India Conformity Assessment Scheme (I-CAS) Halal is mandatory. It adds 20 countries, including Azerbaijan, Uzbekistan, Egypt, Algeria, Kenya, Morocco, and others, to the existing list notified earlier. All other policy conditions remain unchanged, including the requirement that certification be obtained only from NABCB-accredited bodies and compliance with importing country regulations.
(Link: DGFT Notification 59/2026 Dated 09/02/2026)
Correction of suffix in name of Dubai-Based Lab in HBP: The Public Notice amends Para 4.73(19) of the Handbook of Procedures (HBP) under the Foreign Trade Policy (FTP). The name of the listed laboratory ‘GIA Laboratory, DMCC, Dubai, UAE’ has been amended to ‘GIA Laboratory, FZCO, Dubai, UAE’. It changes only the suffix of the entity name from DMCC to FZCO, without altering its location or functional recognition.
(Link: DGFT Public Notice 47/2026 Dated 11/02/2026)
Digital Trade Facilitation bill to recognise E-Trade Documents: The Union Budget has announced implementing Bharat Trade Net as a digital public infrastructure for trade. The draft Digital Trade Facilitation Bill 2026, proposes statutory recognition of electronic trade documents, trusted digital verification mechanisms, and secure cross-border exchange of trade records. The comments from stakeholders are invited.
(Link: DGFT Trade Notice 24/2026 Dated 09/02/2026)
F. Securities and Exchange Board of India (SEBI)
Master Circular for SEBI Issue of Capital and Disclosure Requirements Regulations: The updated Master Circular include all relevant circulars issued up to 31st December 2025, with necessary changes to reflect provisions currently in force. The previous circulars listed in the Appendix stand rescinded to the extent they relate to the ICDR Regulations.
(Link: SEBI Master Circular Dated 09/02/2026)
Revision in IT Capacity Norms for Commodity Derivatives Exchanges: Earlier, the Master Circular required exchanges to maintain system capacity at four times the peak order load. Now, SEBI has aligned the commodity derivatives segment with the broader MII framework, subject to modifications. Installed capacity must now be at least 2 times the projected peak load. Further, if actual utilization exceeds 75% of installed capacity, immediate corrective measures such as system fine-tuning or augmentation are mandatory under SCOT oversight.
(Link: SEBI Circular Dated 11/02/2026)
Tightened CRA disclosure rules due to Cross-Regulator Rating Activities: The circular prescribes detailed obligations for Credit Rating Agencies (CRAs) when rating financial instruments regulated by authorities other than SEBI. It mandates clear operational segregation to avoid investor confusion. CRAs must use separate email IDs and website sections for grievances and disclosures, ensure SEBI’s minimum net worth remains unaffected, and distinctly disclose all activities and their respective regulators. Rating reports, press releases, and marketing materials must clearly state the applicable regulator.
(Link: SEBI Circular Dated 10/02/2026)
Consultation Paper on Review of provisions related to Base Price and Price Bands for Exchange Traded Funds (ETFs): Currently, ETFs use T-2 day closing NAV as the base price and are subject to fixed price bands of +20% (and +5% for Overnight ETFs). The proposal suggests revising the base price to T-1 metrics such as closing price, closing NAV, average iNAV, or latest iNAV. It also recommends differentiated price bands, i.e. +10% initial band (flexible up to +20%) for equity/debt ETFs, +6% initial band (flexible in stages) for gold/silver ETFs and continuation of +5% for Overnight ETFs. The comments/ feedback from stakeholders is invited.
(Link: SEBI Consultation Paper Dated 13/02/2026)
Consultation Paper, Draft Circular on Relaxations in the reporting requirements for Stock Brokers: Under the existing provisions, brokers must appropriately name and tag bank and demat accounts and report their opening and closure to stock. SEBI has proposed aligning exemptions for brokers that are primary dealers with those available to banks and relaxing demat account reporting requirements. It clarify that demat accounts used exclusively for non-broking activities by brokers who are also primary dealers will not require tagging. Brokers that are banks or primary dealers need to report only those bank accounts used for stock broking activities. The comments/ feedback from stakeholders is invited.
(Link: SEBI Consultation Paper Dated 13/02/2026)
Consultation Paper on Review of Minimum Investment to Boost Social Impact Funds: The paper proposes reforms to strengthen the Social Stock Exchange (SSE) framework. The key changes include reducing the minimum investment by individual investors in Social Impact Funds (SIFs) under the AIF Regulations from Rs 2 lakh to Rs 1,000, aligning it with the existing minimum application size for Zero Coupon Zero Principal Instruments (ZCZP). It also proposes extending the registration period for Not for Profit Organizations (NPOs) on SSE from two years to three years without raising funds. Further, it suggests lowering the minimum subscription requirement for ZCZP issuances from 75% to 50% for projects structured on a per-unit basis, subject to due diligence by SSEs. The comments/ feedback from stakeholders is invited.
(Link: SEBI Consultation Paper Dated 09/02/2026)
G. Ministry of Corporate Affairs (MCA)
Amendments in notification 4090(E) dated 19th December 2016 expands list of Regional Directors: The previous notification recognized Regional Directors at Mumbai, Kolkata, Chennai, New Delhi, Ahmedabad, Hyderabad, and Shillong. This has now been substituted with Regional Directors at Ahmedabad, Bangalore, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata, Mumbai, Navi Mumbai, and New Delhi.
(Link: MCA Notification Dated 10/02/2026)
Amendments in notification 6225(E) dated 18th December 2018 expands list of Regional Directors: The previous notification recognized Regional Directors at Mumbai, Kolkata, Chennai, New Delhi, Ahmedabad, Hyderabad, and Shillong. This has now been substituted with Regional Directors at Ahmedabad, Bangalore, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata, Mumbai, Navi Mumbai, and New Delhi.
(Link: MCA Notification Dated 10/02/2026)
Amendments in notification 2938(E) dated 6th September 2017 expands list of Regional Directors: The previous notification recognized Regional Directors at Mumbai, Kolkata, Chennai, New Delhi, Ahmedabad, Hyderabad, and Shillong. This has now been substituted with Regional Directors at Ahmedabad, Bangalore, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata, Mumbai, Navi Mumbai, and New Delhi.
(Link: MCA Notification Dated 10/02/2026)
Amendments in notification 3557(E) dated 31st December 2015 expands list of Regional Directors: The previous notification recognized Regional Directors at Mumbai, Kolkata, Chennai, New Delhi, Ahmedabad, Hyderabad, and Shillong. This has now been substituted with Regional Directors at Ahmedabad, Bangalore, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata, Mumbai, Navi Mumbai, and New Delhi.
(Link: MCA Notification Dated 10/02/2026)
Amendments in notification 891(E) dated 31st March 2015 expands list of Regional Directors: The previous notification recognized Regional Directors at Mumbai, Kolkata, Chennai, New Delhi, Ahmedabad, Hyderabad, and Shillong. This has now been substituted with Regional Directors at Ahmedabad, Bangalore, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata, Mumbai, Navi Mumbai, and New Delhi.
(Link: MCA Notification Dated 10/02/2026)
Amendments in notification 1354(E) dated 21st May 2014 revise Regional Director Designation: The amendment substitutes the reference to the ‘office of Regional Director at Noida’ with ‘Regional Director, Northern Region Directorate I, Headquarter at New Delhi’.
(Link: MCA Notification Dated 10/02/2026)
Appointment of Registrars as Adjudicating Officers: MCA has appointed various Registrars of Companies (RoCs) as Adjudicating Officers under Section 454 of the Companies Act, 2013. The notification specifies detailed territorial jurisdictions for each Registrar across States, Union Territories, and districts, including separate jurisdictions in Delhi, Uttar Pradesh, Maharashtra, Tamil Nadu, and West Bengal. It further provides that appeals against orders of the Adjudicating Officers shall lie before the concerned Regional Directors.
(Link: MCA Notification Dated 10/02/2026)
Amendments in LLP delegated authority provisions: The notification revises the list of Regional Directors empowered to exercise delegated authority in LLP matters. The previous notification recognized Regional Directors at Mumbai, Kolkata, Chennai, New Delhi, Ahmedabad, Hyderabad, and Guwahati. This has now been substituted with Regional Directors at Ahmedabad, Bangalore, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata, Mumbai, Navi Mumbai, and New Delhi.
(Link: MCA Notification Dated 10/02/2026)
Appointment of ROCs as Adjudicating Officers Under LLP Act: MCA has appointed Registrars of Companies (RoCs) as Adjudicating Officers under Section 76A of the Limited Liability Partnership Act 2008. The order specifies detailed territorial jurisdictions for each Registrar across States, Union Territories, and districts, including bifurcated jurisdictions in Delhi, Uttar Pradesh, Maharashtra, Tamil Nadu, and West Bengal, and also covers Sikkim under Kolkata-I. Appeals against orders passed by these Adjudicating Officers shall lie before the concerned Regional Directors
(Link: MCA Notification Dated 10/02/2026)
H. Insolvency and Bankruptcy Board of India (IBBI)
NCLAT, Threshold criteria applies only at the time of filing section 7 Application (CIRP by Financial Creditors): Case of Satyabrata Mitra vs Earth Towne Infrastructure Pvt Ltd, NCLAT Delhi Judgement Dated 4th September 2025. The appellate tribunal held that the threshold criteria is applicable at the time of filing Section 7 application (CIRP by Financial Creditors) under IBC and not subsequently.
NCLAT Dismisses plea to revive CIRP after Corporate Debtor clears Part IV Dues: Case of Campbell Advertising Pvt Ltd vs Vipul Ltd, NCLAT Delhi Judgement Dated 12th September 2025. The appellate tribunal held that once a corporate debtor pays the full default amount (principal and interest) as permitted, no purpose remains for insolvency proceedings.
NCLAT, Insolvency Proceedings against Personal Guarantors upheld despite Corporate CIRP: Case of Neeta Saha vs Assets Care & Reconstruction Enterprise Ltd, NCLAT Delhi Judgement Dated 19th December 2025. The appellate tribunal held that moratorium under Section 14 of the IBC does not preclude Financial Creditors from issuing a loan recall notice to Personal Guarantor during CIRP of Principal Borrower, nor from filing an application under Section 95 against Personal Guarantor.
I. Reserve Bank of India (RBI)
Amendments to Directions on Capital Market Exposure: The amendments create a unified framework that permits banks to provide acquisition financing for corporate takeovers while simultaneously tightening collateral requirements for stockbrokers and other intermediaries.
– Banks can now fund up to 75% of a deal’s value for strategic acquisitions (onshore and offshore) by Indian non-financial companies. The borrower must have a minimum net worth of Rs 500 crore and a 3-year track record of profitability. The acquiring entities must contribute at least 25% equity from their own funds.
–The exposure limits are capped at 40% of a bank’s Tier 1 capital (on both solo and consolidated bases).
–All credit facilities to SEBI-regulated brokers must be fully secured by tangible assets, promoter-only guarantees are no longer sufficient. Banks are explicitly prohibited from financing proprietary trading activities of brokers. Bank guarantees to exchanges must have at least 50% collateral, with 25% in cash.
–Loan to Value (LTV) for listed shares is capped at 60%, while REITs, InvITs, and Equity MFs is capped at 75%. A minimum 40% haircut is mandatory for equity shares accepted as collateral from intermediaries.
(Link: RBI Circular 211/2026 Dated 13/02/2026- CBs Credit Facilities)
(Link: RBI Circular 212/2026 Dated 13/02/2026- CBs Concentration Risk)
(Link: RBI Circular 213/2026 Dated 13/02/2026- CBs Prudential Norms)
(Link: RBI Circular 214/2026 Dated 13/02/2026- CBs Financial Statements)
(Link: RBI Circular 215/2026 Dated 13/02/2026- CBs Undertaking Fin Services)
(Link: RBI Circular 216/2026 Dated 13/02/2026- SFBs Credit Facilities)
(Link: RBI Circular 217/2026 Dated 13/02/2026- SFBs Concentration Risk)
(Link: RBI Circular 218/2026 Dated 13/02/2026- SFBs Prudential Norms)
(Link: RBI Circular 219/2026 Dated 13/02/2026- SFBs Financial Statements)
Amendments to NBFCs Income Recognition, Asset Classification & Provisioning Directions: The amendments introduces specific norms for loan portfolios covered under Default Loss Guarantee (DLG) arrangements. Earlier DLG arrangements were permitted in limited cases for digital lending and later for co-lending. The amended provisions allow NBFCs to consider DLG while determining provisions under the Expected Credit Loss (ECL) framework across all stages, subject to Indian Accounting Standards requirements, including that the DLG must be integral to the loan contract and not recognised separately.
(Link: RBI Circular 210/2026 dated 13/02/2026)
Amendment to NBFCs Credit Facilities Directions: The paragraph 25(1) has been substituted to clarify that asset classification of individual loan assets and the related provisioning requirements shall be governed by the RBI Income Recognition, Asset Classification and Provisioning Directions 2025.
(Link: RBI Circular 209/2026 dated 13/02/2026)
Amendments to Rural Co-operative Banks Income Recognition, Asset Classification and Provisioning Directions: Under the revised framework, Rural Co-operative Banks may recognise income, such as interest, fees, commission, or other charges, on an accrual basis for credit facilities classified as ‘Standard’, without the requirement of making any matching provision. However, for credit facilities not classified as Standard, including those guaranteed by the Government, income must be recognised strictly on an actual receipt (cash) basis. Further, if any credit facility becomes a Non-Performing Asset (NPA), all previously accrued and credited income that remains unrealised must be reversed.
(Link: RBI Circular 208/2026 dated 13/02/2026)
Withdrawal of Grievance Redress Circular after Regulatory Overhaul: RBI has withdrawn its earlier circular dated 27th January 2021 on Strengthening of Grievance Redress Mechanism in Banks. The review follows regulatory and supervisory developments, including consolidation of complaint related disclosure requirements under the Master Direction on Financial Statements- Presentation and Disclosures 2025. Also, the consumer compensation framework has been strengthened under the Reserve Bank–Integrated Ombudsman Scheme 2026, with enhanced compensation limits, and the Internal Ombudsman Directions 2026 now empower Internal Ombudsmen to recommend compensation awards. The banks remain obligated to maintain and continuously strengthen effective grievance redress systems in accordance with regulatory instructions and Board approved policies.
(Link: RBI Circular 207/2026 dated 11/02/2026)
Collateral-Free MSME Loans expanded to Rs. 25 Lakh: The amendments to RBI Lending to Micro, Small & Medium Enterprises (MSME) Sector Directions, revise the collateral framework applicable to micro and small enterprise (MSE) lending. Banks are mandated not to accept collateral for loans up to Rs 20 lakh to MSE units and are advised to extend collateral-free loans up to Rs 20 lakh to all units financed under the Prime Minister Employment Generation Programme (PMEGP). Based on internal policy, banks may further dispense with collateral up to Rs 25 lakh for MSEs with a strong track record and sound financial position. Banks may also avail credit guarantee cover where applicable. Importantly, voluntary pledging of gold or silver by borrowers for loans up to the collateral-free limit will not be treated as a violation.
(Link: RBI Circular 206/2026 dated 09/02/2026)
Draft Circular on Lead Bank Scheme (LBS): Upon a comprehensive review of LBS, the draft revised guidelines has been issued, which supersedes all earlier instructions. These cover various aspects i.e. the structure, membership and agenda of various fora under the scheme, clear delineation of roles and responsibilities of key functionaries and provisions to further strengthen the State Level Bankers’ Committee and Lead District Manager offices, among others. The comments/ feedback from stakeholders is invited.
(Link: Draft Circular on LBS, Press Release Dated 13/02/2026)
Draft Amendment Directions for Lending to Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs): The proposals permit commercial banks to extend finance to REITs, subject to appropriate prudential safeguards including regulatory ceiling for exposure to REITs. The existing guidelines in respect of lending to InvITs (applicable to commercial banks, small finance banks and All India Financial Institutions) are also proposed to be harmonised for parity with prudential safeguards proposed for lending to REITs considering similarity in organisational structure and risks. The comments/ feedback from stakeholders is invited.
(Link: Draft Amendment Directions, Press Release Dated 13/02/2026)
Draft Amendment Directions for Conduct of Regulated Entities in Recovery of Loans and Engagement of Recovery Agents: Upon a review, it is proposed to amend RBI Responsible Business Conduct (RBC) Directions, and issue comprehensive instructions to all regulated entities on conduct related matters in recovery of loans and engagement of recovery agents, which inter alia cover aspects such as fair treatment to borrowers during recovery process, conduct of lender’s employees and recovery agents, due diligence, training, code of conduct for recovery agents, etc. The comments/ feedback from stakeholders is invited.
(Link: Draft Amendment Directions, Press Release Dated 12/02/2026)
Draft Amendment Directions for Higher Unsecured Loan Limits and Relaxed Norms for Urban Coop Banks (UCBs): The proposals seek to rationalise the definition of unsecured advances, raise individual unsecured loan limits (Rs 5 lakh for Tier 1, Rs 7.5 lakh for Tier 2, and Rs 10 lakh for Tier 3 & 4), and increase the aggregate ceiling on unsecured advances to 20% of total loans and advances from the existing 10% of total assets, with limited relaxation for priority sector loans up to Rs 50,000 per borrower. Lending to nominal members for consumer durables is proposed to be enhanced to Rs 2.5 lakh per borrower. Housing loan tenor and moratorium norms are deregulated for Tier 3 and Tier 4 UCBs, while capped for Tier 1 and Tier 2. The comments/ feedback from stakeholders is invited.
(Link: Draft Amendment Directions, Press Release Dated 10/02/2026)
Draft Amendment Directions for Registration Exemption for Small NBFCs without Public Funds: The draft proposes exemption from registration under Section 45IA of the RBI Act, 1934 for eligible NBFCs not availing public funds and not having customer interface, with asset size below Rs 1,000 crore. Such entities will be classified as ‘Unregistered Type I NBFCs’, subject to conditions including annual Board resolution, disclosure in financial statements, and auditor certification. Existing eligible NBFCs, including those holding Type I registration, may apply for deregistration. The comments/ feedback from stakeholders is invited.
(Link: Draft Amendment Directions, Press Release Dated 10/02/2026)
Draft Revised Kisan Credit Card (KCC) Scheme Guidelines: The key changes include standardizing crop seasons into short- duration (12 months) and long-duration (18 months) categories to ensure uniform loan sanction and repayment schedules. The tenure of KCC has been extended to six years to better align with longer crop cycles. Drawing limits will now be linked to the scale of finance for each crop season to reflect actual cultivation costs. Also, eligible expenses now include technological interventions such as soil testing and weather forecasting within a 20% additional component. The comments/ feedback from stakeholders is invited.
(Link: Draft Revised KCC Scheme, Press Release Dated 12/02/2026)
Draft Amendment Directions for Advertising, Marketing and Sales of Financial Products and Services by Regulated Entities: RBI has proposed comprehensive instructions applicable to all banks and NBFCs, covering third- party products, Direct Sales Agents (DSAs), Direct Marketing Agents (DMAs), prevention of mis-selling, and dark patterns. The draft amendments seek to update Responsible Business Conduct (RBC) Directions and framework on ‘Agency Business and Referral Services’ under the Undertaking of Financial Services (UFS) Directions. The comments/ feedback from stakeholders is invited.
(Link: Draft Amendment Directions, Press Release Dated 11/02/2026)
J. Miscellaneous
FDI 100% Allowed in Insurance under Automatic Route: Department for Promotion of Industry and Internal Trade (DPIIT), has issued Press Note No. 1 (2026 Series) revising the Foreign Direct Investment (FDI) policy for the insurance sector under the Consolidated FDI Policy, 2020. The amendment permits up to 100% foreign investment under the automatic route in Indian insurance companies and insurance intermediaries, subject to verification and regulatory compliance. The Life Insurance Corporation of India (LIC) continues to have a 20% FDI cap under the automatic route, subject to the LIC Act, 1956 and applicable insurance laws.
(Link: DPIIT Press Note No 1 Dated 09/02/2026)
Industrial Relations Code Amendment Bill 2026 introduced in Lok Sabha: The Bill has been introduced in the Lok Sabha to amend the Industrial Relations Code, 2020. The amended provision states that the following enactments shall stand repealed from the date appointed in the notification issued in this regard:
(a) the Trade Unions Act, 1926;
(b) the Industrial Employment (Standing Orders) Act, 1946; and
(c) the Industrial Disputes Act, 1947.
(Link: Lok Sabha Bill Introduced Dated 11/02/2026)
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Compiled by: CMA Yash Paul Bhola, MBA, FCMA, Former Director (Finance), National Fertilizers Limited.
Disclaimer: The contents of this article are for informational purposes only. The user may refer to the relevant notification/ circular/ decisions issued by the respective authorities for specific interpretation and compliances related to a particular subject matter)
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